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Microsoft is serious - to the tune of $8.5 billion - about better competing against the likes of Apple and Sony when it comes to everything from mobile phones to video game consoles. On Tuesday, Microsoft announced plans to purchase VoIP service Skype in what will be the biggest deal Microsoft has ever done.

The reaction on Wall Street, however, was anything but overwhelmingly positive in response to the news. Microsoft declined 1.9% premarket after unveiling the purchase plans, stating that Skype will benefit numerous Microsoft products and services like Xbox, Kinect, and Windows Phone, perhaps better competing against Apple's iPhone and it's hugely popular FaceTime video chat functionality.

"Skype is a phenomenal service that is loved by millions of people around the world,” Microsoft Chief Executive Steve Ballmer stated after the acquisition plan was formally unveiled. "Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world."

According to the Wall Street Journal, Skype will become a new business division within Microsoft. Consequently, Skype CEO Tony Bates will become president of the division and report directly to the big guy himself - Mr. Ballmer. 'Microsoft and Skype share the vision of bringing software innovation and products to our customers," Bates said. "Together, we will be able to accelerate Skype's plans to extend our global community and introduce new ways for everyone to communicate and collaborate."

Skype, which was founded in 2003, was acquired by eBay for a relatively paltry $2.6 billion in comparison some six years ago. In 2009, an investment group led by Silver Lake gobbled up Skype, which now appears to have found more permanent home in Microsoft.